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A Charitable Gift

Unique Giving Strategy Provides Retirement Plan for Valued Employee

David Arnold

Among his many contributions to the University of Mississippi, David Arnold served as president of the Ole Miss Alumni Association from 1989-1990.

David and Barbara Arnold of Yazoo City, Mississippi, recently made a gift to the University of Mississippi that doubles as a retirement plan for their faithful household employee of the past 15 years.

"She's just a fine young woman who's like family to us, and we got to thinking, 'You know, she has a lot of years to work before retirement, and we will be gone way before she retires," David Arnold says. "We were concerned that some provision needed to be made for that. So, I started working on it. I wondered, 'How can an individual employer set up a retirement fund for a single employee?'"

Arnold said he researched a number of investment and tax-related options before discovering the UM Foundation's Charitable Gift Annuity (CGA).

"I found, in reviewing it, that you could designate another person to receive the annuity and you could defer it, so those were the two key features that made it work," he says, adding that the annuity will start paying his employee quarterly upon her retirement 17 years from now.

With a simple contract, individuals can transfer to the UM Foundation a minimum of $50,000 cash or securities to purchase a CGA that will provide a fixed income to one or two beneficiaries, and the donor qualifies for a charitable tax deduction for the gift. The CGA then provides a steady stream of income during the beneficiaries' lifetime and the remaining principal passes to the UM program of the donor's choice.

David and Barbara Arnold

David and Barbara Arnold

The Arnolds, both UM graduates, established an endowment in 1991 that benefits the Department of Chemical Engineering and the College of Liberal Arts. The remaining principal of their CGA as well as other support from their estate will be used to further fund their endowment.

"This is the first time we've had someone want to use a charitable gift annuity as a retirement plan," says Sandra Guest, vice president of the UM Foundation. "It's a unique and interesting way to provide for someone's welfare and ensure his or her security well into the future—while also helping Ole Miss."

The Arnolds met in a chemistry laboratory at Ole Miss and married the year they graduated. David Arnold became one of Mississippi Chemical Corporation's senior vice presidents, and Barbara Arnold served on the Manchester Academy and Yazoo City High School faculties.

Barbara Arnold has provided leadership as president and board member for the School of Education's Alumni Chapter as well as on the UM Foundation and Ole Miss Alumni Association boards of directors. She served on the advisory board of the School of Engineering and is a charter member of the Ventress Order, an organization whose members make a financial commitment to the College of Liberal Arts. As an Ole Miss student, she was a member of Zeta Tau Alpha sorority.

David Arnold served as president of the Ole Miss Alumni Association from 1989-1990 and on the boards of the Engineering Alumni Chapter, the UM Foundation and the Ole Miss Alumni Association. In 1989, he was named Engineer of Distinction and was inducted into the Ole Miss Alumni Hall of Fame in 1995. Additionally, he received the Alumni Service Award in 2002. As a student at Ole Miss, he was a member of the Beta Theta Pi fraternity and Navy ROTC.

Through membership in the 1848 Society, the Arnolds have made provisions in their estate plan for support of both the Department of Chemical Engineering and the College of Liberal Arts. Additionally, they created the Charles Noyes Library Endowment and supported the John Pilkington Library Endowment, both of which honor beloved professors.

David Arnold says his employee was "most surprised and very pleased" when he told her about the retirement plan.

For information on gift strategies that can support Ole Miss while providing significant benefits to the donor or beneficiary, contact Sandra Guest at 662-915-5208 or sguest@olemiss.edu.

eBrochure Request Form

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A charitable bequest is one or two sentences in your will or living trust that leave to the University of Mississippi a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

Bequest Language

"I, [name], of [city, state, ZIP], give, devise and bequeath to the University of Mississippi Foundation [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Ole Miss or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support its mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the potential tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Ole Miss as a lump sum.

You fund this trust with cash or appreciated assets—and may qualify for a federal income tax charitable deduction when you itemize. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Ole Miss as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Ole Miss where you agree to make a gift to Ole Miss and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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